WARMELINK govemment will cooperate, unless this is incompatible with the country s allal within the Kingdom. 0 Conversely, the King will not bind the Netherlands antilles and Aruba to such a treaty if the country s govemment, indicating the grounds on which it expects adverse consequences for the country, has declared that the country should not be bound. The same goes for the annulment of financal treaties, unless the treaty s provisions do not allow that the Netherlands Antilles or Aruba are excluded from annulment 11 The position of the insular land territories is striking, in particular the distinction made between Cura cao on the one hand and the other islands on the other. Curacao has the authority, based on the Netherlands antilles Insular Land Territories Regulation(ERNA), to contract money loans independently, provided an island rdinance provides a base for this. Cura cao even has the authority to contract loans outside the Kingdom, provided the Kingdom govemment agrees to this Consequently, the powers of the island of Curacao are comparable with those of the coumtry of the Netherlands Antilles. The other insular and territories, on the other hand, are not allowed to contract loans at all, which largely explains their considerable budget deficits In the area of levying taxes, the semi-federal relation between Country and insular land territories leads to a rather complicated division of powers. An enumeration of the country s powers goes hand in hand with a certa in financal autonomy of the various islands. According to Article 2(a)ERNA, the insular land territories bear no responsibility for legis lation on many, specified taxes. The same goes for the levy and collecting of these taxes On the other hand, the insular land ermitories have the exclusive right to levy surtax, as well as taxes that have not been listed. Besides, the country s legislation on some direct taxes can only be modified after consultations with the governing bodies of the insular land territories On the basis of article 89 of the Constitution of the Netherlands antilles proceeds from taxes and fees levied under an act of that country have to be transferred to the govermment of the insular land territories, in accordance with rules laid down by the Insular Land Territories Regulation, as far as this revenue supposed to originate from the territory concerned. Article 86 ERNA interprets this stipulation in such a way that revenues from the indirect, specified taxes(import and export duties, value added tax, excise, etc ) go to the Country, but that the insular land territory of Curacao should retain 50 percent of the proceeds from that island. It is the governor of the antilles who should determ ine the final amount of Curacao share. According to article 87 ERNA, the proceeds of the direct taxes (incomes and profits, Land-tax, community charge)go to the various insular land territories, though 25 percent of the total proceeds from taxation on income and prof its in Cura cao go to the Country. Such a compulsory payment does not apply to the other islands Localgovernment in the netherlands 3.1 The budgets of the local governments Article 26 of the Charter Article 25 of the CharterWARMELINK 6 government will cooperate, unless this is incompatible with the country s alliance within the Kingdom.10 Conversely, the King will not bind the Netherlands Antilles and Aruba to such a treaty if the country s government, indicating the grounds on which it expects adverse consequences for the country, has declared that the country should not be bound. The same goes for the annulment of financial treaties, unless the treaty s provisions do not allow that the Netherlands Antilles or Aruba are excluded from annulment.11 The position of the insular land territories is striking, in particular the distinction made between Curaçao on the one hand and the other islands on the other. Curaçao has the authority, based on the Netherlands Antilles Insular Land Territories Regulation (ERNA), to contract money loans independently, provided an island ordinance provides a base for this. Curaçao even has the authority to contract loans outside the Kingdom, provided the Kingdom government agrees to this. Consequently, the powers of the island of Curaçao are comparable with those of the country of the Netherlands Antilles. The other insular land territories, on the other hand, are not allowed to contract loans at all, which largely explains their considerable budget deficits. In the area of levying taxes, the semi-federal relation between Country and insular land territories leads to a rather complicated division of powers. An enumeration of the country s powers goes hand in hand with a certain financial autonomy of the various islands. According to Article 2(a) ERNA, the insular land territories bear no responsibility for legislation on many, specified taxes. The same goes for the levying and collecting of these taxes. On the other hand, the insular land territories have the exclusive right to levy surtax, as well as taxes that have not been listed. Besides, the country s legislation on some direct taxes can only be modified after consultations with the governing bodies of the insular land territories. On the basis of Article 89 of the Constitution of the Netherlands Antilles, proceeds from taxes and fees levied under an act of that country have to be transferred to the government of the insular land territories, in accordance with rules laid down by the Insular Land Territories Regulation, as far as this revenue is supposed to originate from the territory concerned. Article 86 ERNA interprets this stipulation in such a way that revenues from the indirect, specified taxes (import and export duties, value added tax, excise, etc.) go to the Country, but that the insular land territory of Curaçao should retain 50 percent of the proceeds from that island. It is the Governor of the Antilles who should determine the final amount of Curaçao s share. According to article 87 ERNA, the proceeds of the direct taxes (incomes and profits, land-tax, community charge) go to the various insular land territories, though 25 percent of the total proceeds from taxation on income and profits in Curaçao go to the Country. Such a compulsory payment does not apply to the other islands. 3 Local government in the Netherlands 3.1 The budgets of the local governments 10. Article 26 of the Charter. 11. Article 25 of the Charter